Byline: Kris Olson
Given the apparently universal support of the estate planning bar, the only question may be whether it can supply sufficient momentum to get a bill proposing local adoption of the Uniform Trust Decanting Act all the way to the governor's desk.
"Decanting" is the act of distributing assets from one irrevocable trust to a new irrevocable trust with different terms, "essentially pouring the assets from one trust into a new trust, leaving the unwanted terms in the original trust," to borrow the definition of a committee that reviewed the UTDA on behalf of the Massachusetts Bar Association's Probate Council.
Decanting is a way of dealing with provisions in irrevocable trusts that no longer carry out the settlor's intent, are impractical to administer under changing circumstances, or would not be in a beneficiary's best interest, the MBA committee adds.
The Supreme Judicial Court recognized a common law right to decant in 2013's Morse v. Kraft, which it extended in the 2017 case Ferri v. Powell-Ferri to an instance in which a beneficiary had a right to request a withdrawal of up to 75 percent of a trust's principal at the time of the decanting.
But rather than rely on common law, 26 states now have some form of a decanting statute. Local estate planning attorneys think it is time for Massachusetts to join the list.
"Generally, the adoption of the act ensures that trustees have the flexibility to react to changing circumstances for the benefit of the beneficiaries and have the protection of law in reframing some trust provisions to look out for their interests," Boston attorney Joseph L. Bierwirth Jr. says.
For example, when it turns out that a designated beneficiary has a disability that would make an outright distribution not make sense, decanting can pour the assets into a special needs trust to protect them, which would better accomplish the settlor's original intent to provide for the person.
The MBA's House of Delegates voted unanimously to support adoption of the UTDA on March 14, which followed a similar endorsement from the Boston Bar Association.
Indeed, Beverly estate planning attorney Joblin C. Younger says he created a slide for an upcoming MCLE presentation with the rhetorical question, "Does anybody oppose this?"
The implication is that the answer is "no."
That being said, no one is disappointed or surprised that the bill filed on Jan. 22 by Sen. Cynthia Stone Creem has not yet reached the finish line, especially...